ArcelorMittal SA and a group led by Russia’s VTB have made separate bids for India’s Essar Steel, which is undergoing bankruptcy proceedings and faces claims of nearly $8 billion.
ArcelorMittal, the world’s biggest steelmaker, has offered a “detailed industrial plan” for Essar Steel aimed at improving its performance and profitability, it said in a statement on Monday after the bidding deadline.
The group Numetal, which said it is led by VTB, has submitted a bid for Essar Steel, it said in a statement.
Numetal said it has other minority shareholders, but did not say who they were. Indian media have reported Essar’s founder Ruia family has a small stake in Numetal.
Essar Steel was among a dozen of India’s biggest debt defaulters that were pushed to bankruptcy court last year after a central bank order aimed at clearing a $147 billion bad loan mountain at the nation’s banks that is choking new lending.
Banks and other creditors and suppliers have staked claims of 507.78 billion rupees ($7.89 billion) from Essar Steel, according to Indian government data.
For ArcelorMittal, which has long sought to build its own plant in India, Essar provides “a compelling opportunity”, the European steelmaker’s Indian-born chief Lakshmi Mittal said in the statement.
ArcelorMittal had earlier been expected to also bid for secondary steelmaker Bhushan Steel and Power, which is also in bankruptcy proceedings, but did not submit a bid. Two of India’s biggest steelmakers JSW Steel and Tata Steel are bidding for Bhushan.
Last week, ArcelorMittal sold its entire stake in India’s Uttam Galva Steels to the Indian company’s founders, a move seen as clearing the way for new steel bids.